The Problem:Everyone knows that the fastest way to grow a new business is to generate positive word-of-mouth references. But, what’s the most efficient way for a start-up online company to do that?

The Company:YouTube allows people to share their videos online and became the fastest growing website in the history of the Internet. Its growth was so impressive that it was acquired in 2006 by Google for $1.65 billion in stock.

The Technology Solution:
How does a startup come out of nowhere and in 18 months get purchased for more than any other online company? It does it by generating more traffic than anyone else. On an average day, YouTube serves more than 100 million video streams.

Although many success factors assisted the rise of YouTube’s traffic, researchers Deepak Thomas and Vineet Buch concluded in 2007 that the company owed much of its phenomenal growth to the use of widget marketing. On the Internet, a widget is a small software program that is designed to be easily inserted into a webpage to provide some added function. There are widgets that are self-contained games, widgets that display late-breaking news items, and widgets that are simply designed to attract attention. You can even create a widget to display the latest entry from your weblog on another website.

By making it easy (through the use of widgets) for visitors to embed YouTube hosted videos on their personal blogs and websites, the site also made it easy for its users to introduce new people to the joys of online video viewing.

The Outcome:

The buzz generated by the clever videos people hosted on YouTube created an escalating flow of traffic to the site. Even better, the resulting incoming links from widely dispersed YouTube widgets on a multitude of websites further boosted YouTube’s Google page ranking. In the end, that flow of traffic became worth more than a billion dollars in less than two years.

But what can you do if the customers who most need what you sell are stubbornly resisting your marketing efforts? Tomorrow, DataDocsDailyDose.com will show you how the world’s largest car manufacturer has learned to help customers who don’t want to admit they have a problem.

–J.D. Mosley-Matchett, Ph.D.“The Data Doc“You have questions? She has answers!

The Problem:
Is there a way to eliminate the cost of reaching perfectly targeted customers who have never heard of your company?

The Company:Scuba.com is an online retailer of scuba diving equipment and accessories, physically located in Irvine, California.

The Technology Solution:
The easiest and least expensive way to generate sales is to get lots of people who know the customers you’re trying to reach. Then get those people to tell all those potential customers how great your company is. After that, you have to convince those people to sell your products for you and only paid them after they’ve made a sale. Of course, the trickiest part is to find such well-connected salespeople who will enthusiastically work under those conditions.

Back in the 1960s, Mary Kay Ash launched a beauty products empire by enabling housewives to sell her cosmetics to their friends and neighbors. Even though those women weren’t seasoned salespeople (at first), the company found that personal enthusiasm and great corporate sales support can make up for all kinds of individual deficiencies.

Today, scuba.com has adopted the Mary Kay sales concept to boost sales, but added a technological twist to ease the sales process. As an online retailer of scuba diving equipment and supplies, scuba.com sells at higher volumes than most neighborhood dive shops. The higher sales volume allows scuba.com to negotiate better wholesale prices, which translate into lower retail prices.

However, scuba equipment lasts for many years. So to continue expanding sales volume, scuba.com must gain sales from recently trained scuba divers who don’t already own regulators and buoyancy compensators. And the best way to reach the hearts and minds of those new divers is to approach them via their instructors.

The Outcome:
Scuba.com provides instructors with an easy way to introduce their students to the website. The scuba.com website allows diving instructors to build their own webpage complete with the equipment recommendations they want to pass along to their students. That targeted word of mouth by the instructors is rewarded with a 3% store credit based pm the value of each student’s purchase.

As a result, scuba.com gets the referrals and the sales without having to pay salaried salespeople. The constantly increasing number of sales keeps scuba.com’s prices low, so the students receive great value for their money. And the instructors benefit by being rewarded with store credits, providing them with more incentive to lead each new class of students to their scuba.com pages.

This electronic sales tool simplifies the Mary Kay formula and whisks it into the 21st century. Next time, DataDocsDailyDose.com will examine a strangely named technology that helped to create a virtual storm of online traffic.

–J.D. Mosley-Matchett, Ph.D.“The Data Doc“You have questions? She has answers!

The Problem:
How can a small, start-up company with a miniscule advertising budget target a limited-edition product to an elusive demographic without breaking its bank?

The Company:Bonobos, selling trendy athletic-cut pants online since October 2007.

The Technology Solution:
Andy Dunn, the Chief Executive at Bonobos has a Stanford MBA and a jaundiced opinion of advertising. But when his business partner designed a limited edition line of pants for Chicago Cubs baseball fans, Dunn knew he’d have to do some innovative marketing to locate men willing to spend $120 to wear bright blue pants with baseballs decorating the lining material and pocket edges.

Dunn decided the best approach would be to try a new Facebook self-service display ad system that had just been introduced in November 2007. Taking its cue from Google’s economic rise via self-service text ads, Facebook designed its Social Ads to be simple to create and deploy. Dunn figures that it took only a few minutes to create an ad only seen by Chicago-area men whose Facebook profiles stated they were Cubs fans.

The Outcome:
Dunn’s quickly launched ad ended up costing the company a total cost of $63. The ad was seen more than 250,000 times. And Bonobos sold out the entire line of pants.

Still, despite the obvious marketing potential offered by Social Ads, there are many Facebook members who consider them problematic. Because Social Ads are based on Facebook’s Beacon technology, there are recurring concerns about real and imagined privacy violations.

Facebook’s introduction of Beacon instantly met with resistance from its community members because there was no mechanism for its 50-million users to opt out of the system’s activity posts. The result was advertiser-sponsored stories being spread to each community member’s circle of friends in a manner that was generally considered an unacceptable form of spam.

Then in October 2007, retailing giant Target further soured the sponsorship possibilities and scored a widely publicized black eye with its misguided attempt to control the actions of its Facebook group dubbed the Target Rounders. The bad publicity made members even more reluctant to trust Facebook’s monetization efforts. Although Social Ads now allow members to prevent any public Facebook display of their private transactions made on other websites, there still remains no way for them to permanently block Beacon ads.

For now, Bonobos’ success proves that Social Ads can provide a win-win-win situation for small-budget advertisers, social network sites, and their online communities. Tomorrow DataDocsDailyDose.com will examine how one company used e-mail to transform its customers into advocates.

–J.D. Mosley-Matchett, Ph.D.“The Data Doc“You have questions? She has answers!

The Problem:
With rapidly falling barriers to entry, competition among online businesses is more intense than ever. How does a new company in an established market gain the trust and customer volume needed to succeed?

The Company:TradeKing, an online discount brokerage site that launched in late 2005.

The Technology Solution:
As a new company entering a seemingly saturated market for online stock trading, founder and CEO Donato A. Montanaro, Jr. launched TradeKing in 2005 with the tag line: “No Minimums, No Catches, No, Seriously.” Taking a low-price approach ($4.95 per trade and 65 cents per option contract) combined with high-tech online tools, TradeKing provides do-it-yourself investors with the power to efficiently and economically “work the Street” with market snapshots, volatility charts, technical analysis based on pattern recognition technology, and research reports on a 24/7 basis.

However, Montanaro didn’t rely on the “if you build it, they will come” philosophy that snares so many budding Internet entrepreneurs. Instead, he used the TradeKing site as a hosting point for multiple blogs, discussion lists, chatrooms, and trading clubs. As he stated in an August 2007 video interview for the Reuters international news service, “Clients who socially network more, trade more.” Montanaro’s premise must be correct, because the site has been dubbed the fastest growing company in its industry.

The Outcome:
For two years in a row, TradeKing has been rated the #1 discount broker by the editors of the Wall Street Journal’s SmartMoney magazine. The Dow Jones magazine Barron’s listed TradeKing among the top five in its March 2007 online broker survey. And if imitation is indeed the sincerest form of flattery, then newcomers such as Zecco.com provide further proof that TradeKing’s community-based business formula is worthy of duplication.

But such mimicry forces TradeKing to embrace continuous technology development to stay one step ahead of its competition. With new product offerings, such as the May 8th, 2008 introduction of Fixed Return Options heralded by Montanaro ringing the opening bell at the New York Stock Exchange, TradeKing appears ready to meet its challengers head on…because resting on one’s laurels is not an option in the age of social networking.

TradeKing is only one company that has tapped into the power of online communities. Tomorrow’s mini-case at DataDocsDailyDose.com will provide you with a look at a very different start-up company that leveraged social networking in a very different way.

Everyone has a story that the world needs to know. But there has always been a prohibitive cost factor if you wished to share your story with people outside your circle of family members and acquaintances. Fortunately, current technology has not only simplified the process of publishing, but it has also reduced distribution costs to zero for aspiring authors.

Following Gutenberg’s invention of the printing press in 1440, little changed over the centuries. Granted that the twentieth century provided automation and power improvements, but presses remained the tools of mass communication and the improvements more directly benefited commercial ventures rather than individual writers.

The first technological breakthrough in personal publishing came about with the rise of the personal computer, laser printer, and desktop publishing programs. Even so, these tools lent themselves more to the production of report and pamphlets rather than bound volumes and novels. There was also the remaining problem of distributing the resulting tome beyond one’s immediate sphere of contacts.

In July 2005, online bookseller Amazon purchased CreateSpace which produced “on demand” DVDs for aspiring videographers. CreateSpace later expanded its production capabilities to include book printing on demand (POD). In August 2007, CreateSpace announced an on demand, self-publishing service for printed books, audio CDs, and video DVDs. Authors can use readily available layout programs to submit their formatted texts to CreateSpace. Amazon.com then lists the book and collects orders from interested buyers.

The physical books aren’t printed until ordered online by paying customers. And the final product is available in either a hardback or paperback version, regardless of whether one copy is sold or a thousand.

Because this POD system requires no advance payment or set-up fees from the author, you no longer have any excuses for keeping your “inner novelist” under wraps. So, get busy and start writing! Meanwhile, DataDocsDailyDose.com will be investigating a new communication technology to share with you tomorrow.

As a university professor, I was fond of assigning group projects. Besides teaching leadership and delegation–not to mention the wisdom of contingency planning–group work is the central mechanism for getting things accomplished in a business setting. I often pointed out to my students that there are no sole proprietorships among the Fortune 500.

So, having recently read Timothy Ferris’ best seller The 4-Hour Workweek, I may have to reconsider that oh-so-20th-century assertion. Mr. Ferris takes the notion of organization and delegation to new extremes via the time-shifting, currency-altering, Web-based world of the 21st century entrepreneur. In light of the variety of outsourcing scenarios presented in his book, those Fortune 500 corporations may well find themselves being successfully challenged by techno-savvy sole proprietors backed by legions of virtual assistants.

Spotlighting firms such as Brickwork India and GetFriday.com, the author points out that it’s not merely the relatively modest pay-scale for highly educated, offshore knowledge workers that makes them perfect candidates for rounding out an understaffed Western business. An equally strategic element is that an assignment made at the end of an American or European work day can be accomplished overnight during normal working hours in India.

So what kind of tasks can a virtual assistant located halfway around the globe perform for your company? Well, virtually anything that doesn’t require a physical presence. They can perform information research, draft written documents, maintain the firm’s accounting books, and even sift through an overloaded e-mail backlog.

Of course, that does raise the question: How many virtual assistants does it take to screw in a light bulb? Well, some things continue to be best done in person. Still, all those outsourced tasks could provide you with enough time to write a best-selling book of your own! So next time, DataDocsDailyDose.com will examine how technology has transformed the modern world of publishing.

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Dr. J.D. Mosley-Matchett

As advisor to a broad range of clients, including IBM, Texas Instruments, and J.C. Penney, Dr. Mosley-Matchett combines both practical experience and advanced training in modern marketing methodologies. Her background includes multimedia and video production, Web development, and the latest in marketing research methodologies. Internationally recognized as a published author and noted researcher, Dr. Mosley-Matchett has been a member of the graduate faculty at the University of Texas at Arlington and has conducted numerous seminars on a variety of marketing topics for the International Institute for Research, various conferences, and numerous professional organizations. She currently serves as the Managing Director for Words & Images, Ltd., an interactive communications development firm located in the Cayman Islands.